Forex Today: Dollar holding onto NFP-related gains, Sino-American tensions, US stimulus in focus

Here is what you need to know on Monday, August 10:

The US dollar is holding onto Friday’s gains, triggered by upbeat Non-Farm Payrolls and escalating Sino-American tensions. The focus is on fiscal stimulus talks, which remain stuck despite presidential intervention. Gold is on the back foot and Bitcoin is trading higher. 

The US economy gained 1.763 million jobs in July, with the unemployment rate falling to 10.2%. The figures beat estimates but still point to a slowdown in hiring amid a resurgence of coronavirus. The JOLTS Job Openings statistics for June are due out on Monday. 

US fiscal stimulus: President Donald Trump signed four executive orders that include federal unemployment benefits worth around $400/week, deferring of payroll tax, and other measures. It is unclear if he has the authority to act and the move seemed to break the deadlock between Republicans and Democrats.

Both sides remain apart on jobless benefits and on state aid. Markets remain optimistic that a deal will be reached. However, support will likely be less ambitious that earlier thought. Safe-haven flows could boost the dollar if the probability for a large package diminishes. 

Sino-American tensions remain elevated after Washington announced sanctions against Hong Kong leader Carrie Lam. Authorities in the city-state arrested Jimmy Lai, a prominent pro-democracy media mogul. US Health Secretary Alex Azar visited Taiwan, angering Beijing. 

US and Chinese trade negotiators will meet to take stock of the trade deal – what genuinely interests markets. So far, the world’s largest economies have been sticking to the Phase One accord signed in January. 

Gold was knocked off the all-time high of $2,075 on Friday and consolidates around $2,030. Silver is consolidating around $28 after nearing $30 last week. 

Bitcoin is trading around $12,000 after a swift move higher. Ethereum is somewhat more stable at around $400 while XRP is holding up near $0.30. 

EUR/USD is trading around 1.18, off last week’s highs. The increase in the old continent’s coronavirus cases seems to remain under control. The SEntix Investor Confidence is eyed. 

GBP/USD is trading below 1.31 ahead of this week’s UK jobs and growth figures. A survey suggests that up to a third of British employers are set to cut jobs by October. 

AUD/USD is holding up above 0.7150, as COVID-19 cases in Melbourne are showing signs of stabilization. 

US coronavirus cases have topped five million and deaths are over 162,000. Nevertheless, the infections’ curve is bending lower while mortalities have stabilized. 

See 2020 US Election: August is for calculating, September for campaigning